What are the financial and ethical implications

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Question - Paul, Frank, and Basil formed Fresh, a greenhouse and garden centre business, 10 years ago, and Paul is about to retire. Paul is not experienced in financial accounting, but knows, based on the partnership agreement, that he is entitled to one-third of partnership assets upon his retirement. Total assets have a book value of $900,000 and Paul feels that he is entitled to his share. Frank and Basil are aware that the market value of the firm's net assets approximates $1,500,000. Frank and Basil plan to form a new partnership. What are the financial and ethical implications of distributing $300,000 to Paul upon his retirement?

Reference no: EM132929408

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